Commission receipts under the India-UK DTAA were treated as business income, not fees for technical services, and not taxable in India.

Under the India-UK DTAA, underwriting commission and selling commission received from Indian companies were held not to be fees for technical services because the relevant services were not made available in the treaty sense. The assessee was entitled to rely on the more beneficial treaty position under section 90(2), and the Tribunal followed its earlier view that such commission receipts fall outside FTS. The income was therefore treated as business income, not taxable in India in the absence of attribution to a permanent establishment.

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Issues: Whether underwriting commission and selling commission received from Indian companies constituted fees for technical services under the India-UK DTAA and were therefore taxable in India.

Analysis: The applicable treaty provisions governed the assessee because section 90(2) permits the assessee to rely on the more beneficial treaty position. The Tribunal treated the issue as covered by its earlier decision holding that management commission, underwriting commission and selling commission do not amount to fees for technical services under the India-UK DTAA. The relevant services were not found to have been made available to the Indian companies in the sense required for treaty taxation, and the income was treated as business income not attributable to a permanent establishment in India.

Conclusion: The commission receipts did not constitute fees for technical services and were not taxable in India; the issue was decided in favour of the assessee.

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